Education Tax Deduction

[Traconator]

Our daughter is a full-time or at least a half-time college student. Can she claim the 1098-T form if she’s still a dependent? Should we consider dropping her as a dependent so she can claim it? She earned $14,839.64 in wages in 2024, while my wife and I had an income of over $180,000. Since we paid for her 2024 tuition, we’re unable to claim the education tax deduction. What’s the best course of action here?"

[DianeW777]

No, the Form 1098-T must be used on the tax return where your daughter is a dependent. So only you can claim the education credit. 

it's not an option about who would be a dependent or independent. It sounds like she does not pay more than half of her own expenses. Here are the rules and you can review them for greater detail, however you are likely the one supporting her.

• Rules for Claiming a Dependent
• Who can I claim as a dependent?

[Traconator]

My wife and I had an income of over $180,000 so we did not get the education tax credit. That's the message we got using Turbo Tax. That's why I asked about if our daughter can claim it.

[MinhT1]

If your daughter is under 19 (or under 24 and a full time student) and she does not provide more than half of his own support for the tax year, you can claim her as a dependent. 

You do have the choice of not claiming her. If you do not claim her, then you lose the Other dependent credit of $500 and you cannot claim her education credit from his form 1098-T.

As for your daughter, on her own tax return, she is asked the question whether she paid more than half of her living expenses with earned income. If the answer is No, then she must say that she can be claimed as a dependent by someone else. 

If someone can claim her as a dependent but does not actually claim her, she can claim the non-refundable part of the American Opportunity credit, but not the refundable part. If she doesn't have any tax liability, then there is no tax benefit for her.